Who must register for sales tax in Malaysia and what are the rates?
Sales tax is charged on taxable goods made in Malaysia by registered manufacturers and on taxable imports. Rates are 5%, 10% or a specific rate; since 1 July 2025, goods not listed in the 5% or specific-rate orders are taxed at 10%. A manufacturer must register once taxable sales exceed RM500,000 in 12 months.
Sales tax is a single-stage tax on taxable goods, not on services. Customs' guides set the rules.
Who is liable
- Manufacturers of taxable goods in Malaysia, once the total value of taxable goods sold exceeds RM500,000 within 12 months (s.13 of the Sales Tax Act 2018). A manufacturer below the threshold may register voluntarily (s.14).
- Importers of taxable goods, who pay when the goods are released from customs control.
Rates. 5%, 10% or a specific rate. From 1 July 2025, the 5% and specific rates are in the Sales Tax (Rate of Tax) Order 2025; goods that appear in neither that order nor the exemption order are taxed at 10%. Some goods that were exempt became taxable at 5% or 10%, so a manufacturer of formerly exempt goods should re-check the threshold.
Traders. Wholesalers and retailers do not charge sales tax on their resale; the tax is embedded in what they pay registered manufacturers.
Returns and payment. Registered persons file SST-02 through the MySST portal for each two-month taxable period, by the last day of the month after the period ends.
Check your product's tariff code against the orders on the Customs website before you set prices.
Legal basis
- Sales Tax Act 2018, ss.13 and 14
- Sales Tax (Rate of Tax) Order 2025
- Sales Tax (Exempted Goods from Tax) Order 2025
Sources
Applies to 2025 onwards · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- What personal income tax rates apply to business owners in Malaysia?Resident individuals pay progressive tax from 0% on the first RM5,000 up to 30% on income above RM2 million. Non-residents pay a flat 30%. The rates apply to total chargeable income after reliefs.
- When does my business have to register for service tax in Malaysia, and at what rate?Service tax is charged on listed taxable services at 8%, except 6% for food and beverage, logistics, telecommunications, parking, construction, private healthcare and private education. Registration depends on the service: RM500,000 in 12 months for rental or leasing and financial services, RM1.5 million for food and beverage, construction and private healthcare, and private schools charging over RM60,000 per student a year.
- What changed in service tax from 1 July 2025?From 1 July 2025 Customs extended service tax to rental or leasing (8%), financial services (8%), beauty treatment (8%), construction (6%), private healthcare (6%) and private education (6%), subject to thresholds and exclusions. Sales tax rates changed on the same date, with unlisted goods taxed at 10%.
- How does real property gains tax (RPGT) work in Malaysia?RPGT is charged on gains from disposing of land, buildings and shares in real property companies. Rates fall with the holding period. For Malaysian citizens and PRs it is 30%, 30%, 20%, 15% in years 1 to 5, and nil from the 6th year. Companies pay 10% from year 6.
- What tax incentives can a Malaysian SME realistically use?Most major incentives, such as pioneer status, investment tax allowance and reinvestment allowance, target manufacturing and approved activities and need approval. Pioneer status exempts 70% of statutory income for five years; reinvestment allowance gives 60% of qualifying spending for established manufacturers.